The Risk of Investing in an IPO

The Risk of Investing in an IPO

IPOs can be a risky investment. For the individual investor, it is tough to predict what the stock will do on its initial day of trading and in the near future because there is often little historical data to use to analyze the company. Also, most IPOs are for companies that are going through a transitory growth period, which means that they are subject to additional uncertainty regarding their future values.

For more information, examine on the interesting journey from the pre-IPO stage to the final IPO placement in the primary market: The Road to Creating an IPO and Interpreting a Company's IPO Prospectus Report.